5307 Derbyshire Dr

Katy, TX 77493

$240,000D-

2 bd · 1.5 ba · 1,540 sqft · Built 1980 · SingleFamily · Active · 76 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,879/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$490
• HOA: −$13
• Vac / Maint / Mgmt: −$395
• Net cashflow: $-277/mo
• Annual: $-3,328/yr
• Cap rate: 4.91%
• Cash-on-cash: -4.95%
• DSCR: 0.78
• 1% rule: 0.78%
• Cash to close: $67,200

Investor read

• This is a 2-bed/1.5-bath single-family listed at $240k.
• At list price, monthly cash flow is $-277 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $191k (20.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $188k (21.7% below list).
• It's been on market 76 days — a 6% lower offer ($226k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $188k (21.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#111 in TX, #3,613 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities D, commute F.
• Katy ISD (suburban): math 61% / reading 63% proficiency, ranked #29 of 826 in TX (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents soft (-0.8%/yr); 2696 active listings in the ZIP; 33 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 29,883 units permitted in Harris County in 2024 (8,621 in 5+ unit buildings).
• Harris County population projected at +47% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 19y ago; this cycle's ask has dropped $25k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $46k; list at $240k implies a 418% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.9% vs local median 3.0% in Katy — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 76 days. Have you received any prior offers? Is the seller open to a 22% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.